0
Q:
A) 7346.64 | B) 8346 |
C) 3456 | D) 4567 |
Answer: A) 7346.64
Explanation:
Explanation:
The only part of this type of calculation that needs particular
care is that concerning the interest rate. The formula assumes that
r is a proportion, and so, in this case:
r = 0.08
In addition, we have P = 5,000 and n = 5, so:
V = P(1 + r)5 = 5,000 x (1 + 0.08)5 = 5,000 x 1.469328 = 7,346.64
Thus the value of the investment will be 7,346.64